OfflineI had a bird dog bring me a lead on a house that is sitting vacant.
Fixed up the house may be worth $90-100k
Spoke with the owner who says they have a small mortgage and owe 20k. Then goes on to tell me that the roof has collapsed in several parts of the house and the city has a lien against the house that is adding $250 daily to the amount owed.
I asked if I could buy the house,for what is owed and take care of the liens if we'd have a deal. Without hesitation he says "Yes".
So I get on the phone and call the county to see if they'd work with me. They tell me as of the day of our phone call that the property has 109,000 in violation fees against it.
I tell them I'm "working" with an investor who seeks out ugly houses with the intent of buying them to fix up nicely... turning once neighborhood eye sores into beautiful houses again which would make the neighbors happy as it would improve the neighborhood and raise property values...
They says that the only way to even discuss the possibility of them "reducing" or "eliminating" the liens" is to "correct the violations" and then come to a board meeting.
I then tell her I was more interested in having a "If I, would you" type" discussion... one that goes along the lines of "if I fix up the house and handle the violations, would you reduce them".
She says the violations would need to be corrected first.
I mention that that is a tremendous amount of risk to purchase a house that is way upside down due to the violations, fix it up and hope you'd play nicely.
She says those are the "standard procedures" and she must follow protocol.
I drove by the house and yup... the car port roof is falling in and you can see the bright blue Florida sky in the kitchen and living rooms. So it'd need trusses, decking, shingles, etc and to be gutted and brought back to life from there.
Anybody have luck dealing with these types of properties?
Respectfully,
FloridaInvestor407
My House Buying Website - www.I-Buy-Florida-Houses.com
My House Selling Website - www.Florida-Wholesale-Houses.com
I have had the same issue come up in Ca. I got a call off one of my bandit signs stating that she had lost the house to a BK and that the court gave her the house back (4 years ago) and no one told her. Taxes, liens and so on. I bought the house (trailer on its own land in a park (rare)) and paid all her taxes and liens (9,100) which included her purchase price of 2k.
I couldn't not even close escrow until I paid them which they had me over a barrel. I get get the park fees reduced by asking (1,200) their lawyer. I think it is worth sending a letter to the board and ask them to consider because the need money and if they demo it the cost is on them. If you don't ask (in writing)then you don't get...
Not having a goal is worse than not setting one..
http://www.deangraziosi.com/real-estate-forums/investing-journals/92139/... -
http://www.deansmedia.com/play.php?vid=266
Do you think sending a letter is better than going to the board meeting in person?
Should this letter be drafted personally or by an attorney?
The neighbors that I talked to are pretty upset that the county has taken this hard nosed stance in the past with other interested buyers. They said they are willing to talk on my behalf and argue that they are NOT looking out for the tax papers and neighbors interests with their stance and have as a result left the house to deteriorate further.
Respectfully,
FloridaInvestor407
My House Buying Website - www.I-Buy-Florida-Houses.com
My House Selling Website - www.Florida-Wholesale-Houses.com
bump-erooni!
Respectfully,
FloridaInvestor407
My House Buying Website - www.I-Buy-Florida-Houses.com
My House Selling Website - www.Florida-Wholesale-Houses.com
Okay this provides a good example of dealing with the county.
In my experience in dealing with the counties all over the nation I have grouped them into the, "I understand and am willing to work a little with you" Or "I am the county you will do what I say. Period"
When you called the county you were talking to someone who has no decisions making power which is why she stated "standard policy"
You will need to talk to someone who's job is to make these decisions. Having the neighbors write up how they are in support of the house being fixed and disappointed in the hardline stance the county is taking can be good ammunition.
You were taking the right approach in your original conversation, just having it not with a decision maker.
Find the email and number of the county commissioner that is charge and spread it out to the neighbors as well.
Good luck on getting them to reduce the costs if you can.
Building code violations can be a profitable way to make money but you have to do it right. Here are the steps (oversimplified it for now and will happy to discuss the details with anyone interested):
1. Find it
2. Acquire it with no risk
3. Sell it quickly
Find It
Getting the list of houses with code violations is not straight forward and can be downright frustrating. Most investors stop here when they don't get the list easily. You have to approach the Building Department of your city and the Health Department. Depending on the size of your city, you can be referred to the county. You need to do the legwork and understand that you can be passed on from one department to the next and from the city to the county.
Once you get the list of sellers with building/health code violations, you can send them a postcard or letter. My postcard has a response rate ranging from 10% to as high as 30% because there are very few investors sending letters to owners with code violations.
Acquire it With No Risk
How do you do this? Put it under a Purchase contract with an inspection contingency with as long a period that you can get to inspect the property. Part of your inspection is checking with the city the code violations and the fines and penalties that need to get paid. These fines and penalties must be factored in your purchase price - in other words, buy the property even cheaper than you normally would!
Sell it Quickly
One tip I tell people - and this is a tip you don't hear from the so-called real estate gurus - is calling landlords from the list of approved Section 8 properties. Of course you need to pre-screen them to find out who among the landlords (specially in the inner cities where properties with code violations tend to be) are still buying right now and who among them are cash buyers. If you buy the property right, selling it is the easiest part of the process.
Hope this helps. Code violations is a great niche to "mine" because there is very little competition, the sellers are desperate to sell (and very easy to work with) and they have multiple properties (repeat business!).ttrajano